On Monday July 26 the SPX moved still higher setting another new record and leaving behind a new up signal.
The day ended with a gain of 10 points to close at 4422. Let’s review the closing technical indicators to see what Tuesday holds for stocks.
Stock Market Outlook Chart Comments At The Close on Mon Jul 26 2021
The S&P closed above the 21 day moving average and at the Upper Bollinger Band. This left a bullish candlestick for Tuesday and another overbought signal.
The Upper Bollinger Band is now starting to climb again while the Lower Bollinger Band is swinging higher and moved above the 50 day moving average. These signals are normally bullish but the index is very overbought so a dip is still likely.
All the major moving averages are still climbing which is bullish.
Stock Market Outlook review of Mon Jul 26 2021
Stock Market Outlook: Technical Indicators Review:
Momentum: Momentum is unchanged and still positive.
- Settings: For momentum I use a 10 period when studying market direction.
MACD Histogram: MACD (Moving Averages Convergence / Divergence) issued a down signal on Friday July 16. On Mon Jul 26 2021 a new unconfirmed up signal was issued.
- Settings: For MACD Histogram, I am using the Fast Points set at 13, Slow Points at 26 and Smoothing at 9.
Ultimate Oscillator: The Ultimate Oscillator is rising and overbought.
- Settings: The Ultimate Oscillator settings are: Period 1 is 5, Period 2 is 10, Period 3 is 15, Factor 1 is 4, Factor 2 is 2 and Factor 3 is 1. These are not the default settings but are the settings I use with the S&P 500 chart set for 1 to 3 months.
Slow Stochastic: The Slow Stochastic still has an up signal in place and is overbought.
Settings: For the Slow Stochastic I use the K period of 14 and D period of 3. The Slow Stochastic tries to predict the market direction further out than just one day.
Relative Strength Index: The RSI signal is rising and overbought.
- Settings: The relative strength index is set for a period of 5 which gives it 5 days of market movement to monitor. It is often the first indicator to show an overbought or oversold signal.
Rate of Change: The rate of change signal is falling indicating we could see less movement in prices on Tuesday.
- Settings: Rate Of Change is set for a 21 period. This indicator looks back 21 days and compares price action from the past to the present. With the Rate Of Change, prices are rising when signals are positive. Conversely, prices are falling when signals are negative. As an advance rises the Rate Of Change signal should also rise higher, otherwise the rally is suspect. A decline should see the Rate Of Change fall into negative signals. The more negative the signals the stronger the decline.
Support and Resistance Levels To Be Aware Of:
4400 is resistance
4370 is resistance
4350 is light support
4300 is light support
4290 is light support
4270 is light support
4250 is light support
4225 is light support
4200 is light support
4175 is light support
4150 is light support
4100 is good support
4070 is light support
4050 is light support
4000 is good support
3900 is support
3850 is support
3800 is support
3750 is good support
3700 is light support
3680 is light support
3600 is strong support
Stock Market Outlook for Tomorrow – Tue Jul 27 2021
For Tuesday the technical indicators are primarily positive but signaling the market is overbought.
A dip is likely on Tuesday but the MACD up signal, although unconfirmed, is advising that more upside should be expected.
Tuesday will see dips and while there is a potential for a slightly negative close, the outlook is still higher on Tuesday.
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